Consolidating debt when remortgaging for manageable monthly payments

What was the situation?

My clients were a married couple looking to consolidate debt into their residential mortgage as part of their remortgage. Their preference was a repayment mortgage as they were keen to pay down the debt via the monthly payments.

Having lived in the property for almost 25 years, the clients had an interest-only mortgage with an outstanding balance of £190k and no viable repayment strategy. At the time we first spoke, between them they had £20k of short-term debt spread over almost 20 lenders, most of which were at their limits. The clients had realised that due to their age, if they continued spending this way they would reach retirement age and still have a large amount owing to their lenders.

What was the issue?

The issue began during the pandemic when the client started increasing their spending on credit cards due to a reduction in their normal working arrangements. By increasing their spend and not paying down the loans, they have accrued a high debt-to-income ratio which meant they kept failing high-street lenders’ affordability tests. The clients also had a telecom default on their credit report which they were unaware of from a few years ago after missing a payment.

What was the process?

By working closely with the clients, I was able to rectify several discrepancies on their credit reports. We were able to navigate a challenging and volatile mortgage market that saw rates changing daily.

Following us obtaining an agreement in principle, this application involved a lot of dialogue with our relationship manager due to the number of credit commitments that the clients held meaning that on paper the application would not match the criteria of the lender.

Rather than placing this case with an adverse lender that would cause the client to pay a much higher interest rate, we diligently worked with the lender to secure a great rate for the clients during a very challenging time in the wider mortgage market

What was the solution?

Working collaboratively I managed to secure a rate of just over 4% fixed for 5 years at 63% LTV allowing the clients to remortgage and consolidate their debts.

The clients were so grateful that we were able to reduce their monthly outgoings to a manageable and affordable amount. They were no longer paying huge amounts of interest on their store & credit cards. This gave them the ability to get their finances in order rather than being stressed by the financial situation that they found themselves in previously.

Lending solutions with LDN Finance

Are you looking to consolidate debt when remortgaging? We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, our expert brokers have extensive experience in providing creative solutions to secure large loans for our clients.

We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates. 

Get in touch with us to organise an initial consultation.